(MONEY Magazine) – Mark Holowesko appears to be the very model of a modern global money manager. $ He is disarmingly young (34), lives in an offshore tax haven (the Bahamas) and drives a big BMW. He was groomed for the job by Sir John Templeton, 81 (see left), a Bahamas-based Briton renowned as the dean of international investing and patriarch of the Templeton family of 70 funds deploying $31 billion worldwide. When Sir John began to retire from full-time portfolio management in 1987, he boldly chose the then 27-year-old Holowesko to take charge of the family jewels -- Templeton's Growth, Foreign and World stock funds, with combined assets of $14 billion (5.75% load; 800-342-5236). Two years later the whiz was also named the firm's chief of research. Sir John seems to have named a worthy successor. The flagship Growth Fund, invested mostly in big-name U.S. and European stocks, returned 17% annually over the past three years, vs. an average of 12% for similar funds. (World Fund, Growth's clone, also gained 17% annually. Foreign, which invests only outside the U.S., rose 14%.) What's equally impressive is that in achieving this feat Growth was 44% less risky than the norm, according to fund ranker Morningstar. Holowesko, however, is quick to stress that his BMW 740, like many of his funds' holdings, was originally bought on the cheap. "It's a pampered 1982 model I picked up secondhand last year for a song," he says. And in sharp contrast to many of his peers, Holowesko isn't perennially bullish. One reason he's cautious is that almost all of his liquid net worth is invested in the funds he manages. Holowesko fears most stocks in the world are still pricey and ripe for a bear market that, he says, "could lop 20% off the Dow and even more from thinly traded exchanges abroad." A major concern, he explains, is that the flood of money into mutual funds is waning in step with other sources of liquidity -- the excess, or investable, cash not needed to fuel the economy or repay debt. As a precaution, his three funds have record cash hoards ranging from 23% to 30% of assets, vs. about 5% normally. The few stocks that Holowesko is comfortable buying tend to be recession-mauled manufacturers whose prices reflect little of the cyclical earnings rebound he envisions over the next three to five years. Below are three such cyclicals that he recommends (two European, one American), plus a pair of foreign phone companies. The foreign stocks trade here as ADRs (American Depositary Receipts), except for steelmaker Arbed, which can be bought on the Brussels exchange. "All of the stocks have the potential to double within five years," predicts Holowesko.

Georgia-Pacific (ticker symbol: GP; lately $67 on the New York Stock Exchange). The world's top lumber and paper producer (an-nual sales: $12 billion) has lost money over the past three years despite a 49% upturn in home building. One culprit, notes Holowesko, was tepid U.S. demand for paper since GP's ill-timed $866 million record investment in new plant in 1990. Still, he says the firm managed to increase its cash flow in '92 and '93 and figures to earn $4 a share in '94. Longer term, he believes GP can profit big from an expected paper chase in fast-developing economies such as China. There, he says, annual per capita consumption is just 33 pounds, vs. a staggering 675 in the U.S. "We think GP can triple earnings per share over the next three to five years," he says. Stet Group (STFEY; traded over the counter, $31). Holowesko is also banking on earnings per share tripling (from $1.50 to $4.50) over the same period at $18 billion Stet, Italy's normally lethargic Ma Bell. His rationale: The system's $36 billion modernization program is winding down, sharply reducing debt expense, at a time when regulators are approving new, higher-margin business services such as 800 lines. And Holowesko expects Stet's cellular- phone operation, Europe's largest contiguous network covering more than a million customers, to be spun off as an independent unit within the next 12 months, revealing values hidden within the parent. Telefonos de Mexico (TMX; NYSE, $60). Since February, the ADRs of Mexico's phone monopoly have skidded 19% in response to political unrest that peaked with the March 23 assassination of the country's leading presidential candidate. But Holowesko says he's "aggressively buying Telmex" based on his forecast of the $8 billion Telmex's profits doubling in three to five years. The impetus: Freer trade and higher living standards figure to sustain 12% annual growth in new lines and greater increases in monthly bills (up an average of 35% in the past two years). "Mexico still has lots of room to grow with only nine lines per 100 people, vs. 12 in wealthier Argentina," he says. Arbed Group (lately 4,540 Belgian francs, or $132). Like many small European steel mills, Luxembourg-based Arbed has been hammered by recession and heavy spending of $1.4 billion to upgrade aged plants. But Holowesko says the stock's a steal because the $5.3 billion firm is now the region's lowest-cost producer, with its shares selling at only half their book value (vs. two times book for German heavyweights like Thyssen). "At that price, we can afford to wait for a turnaround," he says. He thinks Arbed, which lost $17 a share in '93, "can break even this year and earn as much as $29 a share as the sector picks up steam in the next three to five years."

DSM Group (DSMKY; OTC, $16). This $4.2 billion Dutch chemical maker, notes Holowesko, is also a low-cost producer that has invested heavily in new plant and is a rare bargain. "Investors have shunned DSM since it slashed its dividend last year," he relates. What they have overlooked is DSM's potential to break even in '94 and "earn $8 to $9 a share later in this decade." DSM sells at an enticing 15% discount to book value, vs. its Euro-rivals' average 50% premium to book.